How an ‘Unlocked’ iPhone 4 Would Work

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We tech journalists love our silly jargon, even if it’s gibberish to the average user. So if you heard the rumor that Apple will start selling an unlocked iPhone 4 on Wednesday, allow me to explain what that means.

If you buy an iPhone in the United States today, you must pledge allegiance to a single wireless carrier and never go astray. An AT&T iPhone will always be an AT&T iPhone, unless you’re willing to do a bit of hacking and “unlock” the phone yourself. An official unlocked iPhone 4 would, in theory, let users switch wireless carriers at will, without hacking or worrying that future Apple software updates will turn their phones into paperweights.

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But here’s where it gets tricky: In the United States, AT&T and T-Mobile use a separate set of wireless frequencies (called GSM) than Verizon Wireless and Sprint use (called CDMA). And iPhones are only equipped to work on one set or the other, so you can’t take an AT&T iPhone to Verizon or vice versa.

Even moving between compatible carriers is difficult or impossible. An unlocked AT&T iPhone can connect to T-Mobile’s network, but it’s stuck on sub-3G data speeds. So far, no one’s released an unlock method for the Verizon iPhone, and it’s unclear whether Sprint would even activate such a device.

The main reason you’d want an unlocked phone is not to move between U.S. carriers, but to temporarily use a different carrier when traveling overseas. AT&T’s international rates are pretty high, so if you could simply swap out the iPhone’s SIM card — the component that connects to the network — you could save a lot of money by going with a local carrier instead.

But here’s the other complication: Unlocked phones are typically sold unsubsidized, without two-year contracts. The off-contract iPhone 4 starts at $600, compared to $200 for a 16GB iPhone 4 with a two-year contract. You’d have to spend a lot of time abroad to make the extra cost worthwhile.

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The one wild card here is the fact that Apple has already started using a chip that can work on both AT&T’s and Verizon’s networks. It’s inside the Verizon iPhone 4, but lacks the SIM card slot and antennas that are necessary for other carriers.

If Apple does release an unlocked iPhone 4, it could use the new chip to work on the nation’s two biggest carriers while also allowing for cheap rates with overseas carriers, but this seems like a stretch to me.

Anyway, all of this assumes that the rumor, based on a Tweet from a supposedly reliable source, is accurate. For this reason, and all the others listed above, I wouldn’t get too excited for an unlocked iPhone 4 just yet.

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